Meta 1Q24 Earnings, About Meta’s “AI-Recommendation” System, Meta’s HW Sales

April 26, 2024 by Neil Cybart

Hello everyone. Today's update will be dedicated to discussing Meta's earnings. Let's jump right in.

Meta 1Q24 Earnings

Meta’s 1Q24 earnings release was a tale of the conference call. Actual results found in the release were what we have come to expect from the company. Meta’s advertising machine found its feet in 2023 after a shaky period involving macro headwinds and renewed competitive pressure. Revenue was up 27% with operating income up 91%.

While we can take issue with some of the inner workings of that advertising machine when it comes to AI - which we will discuss shortly – there is no debate that Meta's monetization struggles of 2022 and early 2023 have dissipated.

Management's 2Q24 guidance is pointing

An Above Avalon membership is required to continue reading this update. Members can read the full update here. (Members: Daily Updates are accessible via the archive. If you haven’t logged into the archive before, fill out this form to receive an invite.)

Choose either a monthly or annual membership. Payment is hosted by MoonClerk and secured by Stripe. Apple Pay and other mobile payment options are accepted. After signup, use this link to update your payment information and membership status at any time. Contact me with any questions.

Subscribe $20/month

Subscribe $200/year

Contact me directly if you would like to purchase multiple subscriptions (five or more) for your team or company.

An audio version of the newsletter is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here. Special Inside Orchard bundle pricing is available for Above Avalon members. Additional membership customization is available via the Financial Models add-ons.

Thoughts on How Zuckerberg Can Monetize Meta Reality Labs

February 15, 2024 by Neil Cybart

Monday’s update concluded with the following:

“Meta has reported more than $38B of operating losses on its AR/VR efforts. The company needs products like Quest 3 and Ray-Ban Meta to do well and generate revenue to reduce pressure on what are mounting losses.”

There is more to say about the mounting losses in Meta’s Reality Labs and why I think generating some revenue is important. We will focus on that topic today. Our Big Tech earnings reviews will continue tomorrow.

An Above Avalon membership is required to read this update. Members can read the full update here. (Members: Daily Updates are accessible via the archive. If you haven’t logged into the archive before, fill out this form to receive an invite.)

Subscribe $20/month

Subscribe $200/year

Payment is hosted by MoonClerk and secured by Stripe. Apple Pay and other mobile payment options are accepted. After signup, use this link to update your payment information and membership status at any time.

An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here. Special Inside Orchard bundle pricing is available for Above Avalon members. Additional membership customization is available via the Financial Models add-on.

Meta 4Q23 Earnings, Estimating Meta Quest 3 Sales, Ray-Ban Meta and AI

February 12, 2024 by Neil Cybart

There are several Big Tech earnings reports for CY4Q23 worth going over. For those of you who recently became Above Avalon members, my approach to covering Big Tech earnings is twofold:

Assess how Apple competitors are doing from a financial/business perspective. This will involve looking at revenue growth metrics, cash flow generation, etc. Given major differences in business models, the metrics will need to be put into proper prospective.
Look for developments that shine light on competitive dynamics that stand to impact Apple. This may include everything from advertising to hardware.

Today’s update will be dedicated to Meta, a company that is turning into one of Apple’s most direct competitors.

Subscribe $20/month

Subscribe $200/year

Meta 3Q23 Earnings, Meta Hints at Sluggish Quest 3 Sales

November 15, 2023 by Neil Cybart

Hello everyone. Meta reported earnings back on October 25th, a few weeks after the company’s Connect conference (discussed in greater detail here). When looking at the competitive landscape, Meta has become one of Apple’s top competitors. Accordingly, we continue to fully cover the company’s business performance and strategy. Let’s jump right in.

Meta 3Q23 Earnings

Meta’s reported 3Q23 numbers were strong.

23% revenue growth
143% operating income growth
168% EPS growth

Much of this strength was expected. Revenue exceeded the midpoint of management’s guidance by just 3%, boosted by a FX tailwind.

Meta continues to see stabilization in its core business of monetizing user attention via advertising. This is the third consecutive quarter that showed such stabilization. A very easy year-over-year compare is certainly helping Meta. The company had a tough 2022. The stronger dollar is helping as well. However, there is legitimate improvement found within Meta’s core business, such as better Reels monetization.

In what is still difficult to get one’s mind around, Meta’s employee count at quarter end was down 24% year-over-year. This is obviously helping to cut expense growth and boost operating margins.

An Above Avalon membership is required to continue reading this update. Members can read the full update here. An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Subscribe $20/month

Subscribe $200/year

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.

Meta 2Q23 Earnings, Reality Labs Losses, Meta Stock

July 28, 2023 by Neil Cybart

Happy Thursday. We will continue our earnings reviews with Meta. The discussion includes Neil’s thoughts on Meta’s 2Q23 results, the significant loses associated with Reality Labs (AR/VR), and Meta’s stock rollercoaster. Apple reports earnings a week from today – Thursday, August 3rd.

Meta 2Q23 Earnings

Meta’s core business of monetizing user attention via advertising continues to stabilize. We saw the early stages of this improvement in Meta’s last earnings release three months ago.

Management provided a few factors behind the continued improvement in 2Q23:

An easier year-over-year compare. 2022 saw weakened results. 2Q marked a full quarter without Russia revenue.
Improved Reels monetization.
Increased ad supply.
FX turning from a revenue growth headwind to tailwind. (This is something to note with Apple’s earnings next week.)

There is a simpler explanation at play for the continued stabilization: Thanks to Reels, Meta’s TikTok copycat, Meta is holding its own on the engagement front against TikTok. Not only is Reels keeping users on Facebook and Instagram, but it appears to be successfully adding new people into the Meta fold.

Key Meta data points from the quarter:

3.9B people use at least one Meta property on a monthly basis.
3.1B people use at least one Meta property on a daily basis in June.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Subscribe $20/month

Subscribe $200/year

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.

Meta 3Q22 Earnings, Meta’s Fragile Bridge, The Big (Meta) Picture (Daily Update)

November 02, 2022 by Neil Cybart

In today's update, we will go over Meta’s CY3Q22 results which ended being just as much about industry developments as it did Meta’s performance. In particular, we go over Neil’s thoughts on two problems found with Mark Zuckerberg’s plan on funding future bets and the ultimate bet Zuckerberg is making here.

Happy Wednesday.

Late last week, Apple released its 2022 10-K (58 pages). The tentative plan is to go through the key takeaways from the financial filing tomorrow.

In today's update, we will go over Meta’s CY3Q22 results which ended being just as much about industry developments as it did Meta’s performance.

Let’s jump right in.

Meta 3Q22 Earnings

Last Wednesday, Meta reported 3Q22 earnings.

Here is an earnings recap table comparing Meta's numbers to those of Apple and Alphabet:

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Subscribe $20/month

Subscribe $200/year

\Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

The daily updates have become widely read and influential in the world of Apple and technology. They are unmatched in the marketplace in terms of comprehensive analysis and research on all things Apple. Members reside in 60 countries and hold a diverse range of backgrounds and occupations. They include Silicon Valley executives and investors, the largest Apple shareholders, and the leading Apple journalists in the business.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.